Inflation Drops to 15.91% in October 2017, 0.07% Lower Than 15.98% September Rate

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The Consumer Price Index (CPI) which measures inflation increased by 15.91 percent (year-on-year) in October 2017. This was 0.07 percent points lower than the rate recorded in September (15.98) percent making it the ninth consecutive inflation (slowdown in the inflation rate though still positive) in headline year on year inflation since January 2017.

Increases were recorded in all COICOP divisions that yield the Headline Index.

While average headline year on year inflation for the first five months of the year (January to May 2017) stood at 17.45 percent, average headline year on year inflation for the next five months of the year (June to October 2017), stood at 16.01 percent indicating disinflation from June to date, compared to from January to May 2017.

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On a month-on-month basis, the Headline index increased by 0.76 percent in October 2017, 0.02 percent points lower from the rate of 0.78 percent recorded in September. This represents the fifth consecutive month on month contraction in headline inflation since May 2017.

While average headline month on month inflation for the first five months of the year (January to May 2017) stood at 1.54 percent, average headline month on month inflation for the next five months of the year (June to October 2017), stood at 1.06 percent indicating disinflation from June to date compared to from January to May 2017.

This indicates that while prices have remained high in 2017, they have tended to slow down their pace of increase since May 2017 both on a year on year and month on month basis.

The percentage change in the average composite CPI for the twelve-month period ending in October 2017 over the average of the CPI for the previous twelve-month period, which has also trended downwards since May 2017 was 16.97 percent, showing 0.2 percent point lower from 17.17 percent recorded in September 2017.

The Urban index rose by 16.19 percent (year-on-year) in October 2017, up by 0.01 percent point from 16.18 percent recorded in September and the Rural index increased by 15.67 percent in October 2017 down from 15.81 percent in September 2017.

On a month-on-month basis, the urban index rose by 0.82 percent in October 2017, down from 0.84 percent recorded in August, while the rural index rose by 0.72 percent in October 2017, down from 0.74 percent in September.

The corresponding twelve-month year-on-year average percentage change for the urban index was 17.57 percent in October. This was less than 17.87 percent reported in September 2017, while the corresponding rural inflation rate in October was 16.41 percent compared to 16.52 percent recorded in September 2017.

Food Index

High food price and food price pressure continued into September though generally at a slower pace.

The Food Index increased by 20.31 percent (year-on-year) in October, down marginally by 0.01 percent points from the rate recorded in September (20.32 percent).

While average year on year food inflation for the first five months of the year (January to May 2017) stood at 18.67 percent, average year on year food inflation for the next five months of the year (June to October 2017), was higher at 20.22 percent indicating higher food price inflation on average in the second five months of the year compared to the first five months.

On a month-on-month basis, the Food sub-index increased by 0.85 percent in October, down from 0.87 percent recorded in August. This represents the fifth consecutive disinflation in month on month inflation since a 2017 high of 2.57% in May 2017. October 2017 also represents the lowest recorded month on month inflation since September 2016.

While average month on month food inflation for the first five months of the year (January to May 2017) stood at 2.01 percent, average month on month food inflation for the next five months of the year (June to October 2017), stood at 1.27 percent indicating a general slow-down in the rise in food prices from June to date compared to from January to May 2017, though the rate of price increases has remained generally higher on a year on year basis.

The average annual rate of change of the Food sub-index for the twelve-month period ending in October 2017 over the previous twelve month average was 19.14 percent, 0.26 percent points from the average annual rate of change recorded in September (18.88) percent

The rise in the food index, in October 2017 was caused by increases in prices of bread and cereals, meats, oils and fats, coffee tea and cocoa, milk cheese and eggs vegetables and fish. 

All Items Less Farm Produce/Core Inflation

The ‘’All Items less Farm Produce’’ or Core sub-index, which excludes the prices of volatile agricultural, stood during the month of October at 12.14 percent points from 12.12 percent recorded in September as all key divisions which contributes to the index increased.

While average year on year core inflation for the first five months of the year (January to May 2017) stood at 15.41 percent, average year on year core inflation for the next five months of the year (June to October 2017), was lower at 12.24.

On a month-on-month basis, the Core sub-index increased by 0.76 percent in October, lower from 0.80 percent recorded in September.

While average month on month core inflation for the first five months of the year (January to May 2017) stood at 1.07 percent, average month on month core inflation for the next five months of the year (June to October 2017), stood at 0.96 percent.

The average 12 month annual rate of change of the index was 14.41 percent for the twelve-month period ending in October 2017; this is 0.49 percent points lower than 14.90 percent recorded in September.

The highest increases were recorded in prices of maintenance and repair of personal transport equipment and other services related to personal transport equipment, air transport, Vehicle spare parts, carpets and other floor coverings, furniture and furnishings and repair of furniture, solid and liquid fuels , Shoes and other foot ware and Garments, clothing materials, other articles of clothing and clothing accessories. 

State Profiles 

In analyzing price movements under this section, note that the CPI is weighted by consumption expenditure patterns which differ across States. Accordingly, the weight assigned to a particular food or non-food item may differ from State to State making inter State comparisons of consumption basket inadvisable and potentially misleading 

All Items Inflation

In October 2017, all times inflation on a year on year basis was highest in Bauchi (23.87%), Nasarawa (20.23%) and Kebbi (19.17%), while Kogi (9.83%), Abuja/FCT (13.23%) and Edo (13.42%) recorded the slowest rise in headline inflation.

On a month on month basis however, October 2017 all items inflation was highest in Bauchi (1.6%), Jigawa (1.45%) and Benue (1.35%), while Sokoto (-0.43%) and Abia (-0.33%) which recorded price deflation or negative inflation (general decrease in the general price level of goods and services or a negative inflation rate) in October as well as Akwa Ibom (0.20%) recorded the lowest  all item inflation in October 2017 

Food Inflation

In October 2017, food inflation on a year on year basis was highest in Kwara (26.27%), Nasarawa (26.18%) and Kano (24.70%), while Kogi (11.61%), Bauchi (14.41%) and Benue (16.21%) recorded the slowest rise in food inflation.

On a month on month basis however, October 2017 food inflation was highest in Kwara (2.38%), Benue (1.93%) and Edo (1.77%), while Abia (-0.69%), Sokoto (-0.53%), Cross River (-0.22%) and Enugu (-0.16%) which recorded food price deflation or negative inflation (general decrease in the general price level of goods and services or a negative inflation rate) in October recorded the lowest food inflation in October 2017.

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